Qiagen N.V SC 14D9/A, filed Aug 5, 2020
Qiagen N.V. (QGEN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
(RULE 14d-101)
SOLICITATION/RECOMMENDATION STATEMENT
UNDER SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 4)
QIAGEN N.V.
(Name of Subject Company)
QIAGEN N.V.
(Name of Persons Filing Statement)
Ordinary shares, par value EUR 0.01 per share
(Title of Class of Securities)
N72482123
(CUSIP Number of Class of Securities)
Roland Sackers
Chief Financial Officer
QIAGEN N.V.
Hulsterweg 82
5912 PL Venlo
The Netherlands
Tel: 011-31-77-355-6600
(Name, address and telephone numbers of person authorized to receive notices and communications
on behalf of the persons filing statement)
With copies to:
Jonathan L. Kravetz, Esq.
Matthew J. Gardella, Esq.
John P. Condon, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
(617) 542-6000
| ☐ | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
This Amendment No. 4 to Schedule 14D-9 (this “Amendment No. 4”) amends and supplements the Solicitation/Recommendation Statement on Schedule 14D-9 originally filed with the Securities and Exchange Commission (the “SEC”) on May 18, 2020 (the “Initial Schedule 14D-9,” as amended by Amendment No. 1 to Schedule 14D-9, filed with the SEC on June 15, 2020, Amendment No. 2 to Schedule 14D-9, filed with the SEC on July 16, 2020 and Amendment No. 3 to Schedule 14D-9, filed with the SEC on July 22, 2020, together with any subsequent amendments and supplements thereto, the “Schedule 14D-9”) by QIAGEN N.V., a public limited liability company (naamloze vennootschap) organized under the laws of The Netherlands registered with the trade register in The Netherlands under file number 12036979 (“QIAGEN”) relating to the tender offer by Quebec B.V. (“Bidder”), a private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) organized under the laws of The Netherlands and a wholly owned subsidiary of Thermo Fisher Scientific Inc., a Delaware corporation (“Thermo Fisher”), for all issued ordinary shares, par value €0.01 per share (the “QIAGEN Shares”), of QIAGEN (the “Offer”).
All information regarding the Offer as set forth in the Schedule 14D-9, including all exhibits and annexes that were previously filed with the Schedule 14D-9, is hereby expressly incorporated by reference into this Amendment No. 4, except that such information is hereby amended and supplemented to the extent specifically provided for herein. Capitalized terms used but not defined in this Amendment No. 4 have the meanings ascribed to them in the Schedule 14D-9.
Item 8. Additional Information
Item 8 of the Schedule 14D-9 is hereby amended and supplemented by adding the following:
“On August 4, 2020, QIAGEN issued a press release announcing results for the second quarter and first half of 2020. A copy of the press release is attached hereto as Exhibit (a)(5)(U) and is incorporated herein by reference.”
Item 9. Exhibits
The exhibit list in Item 9 of the Schedule 14D-9 is hereby amended and supplemented by adding Exhibit (a)(5)(U) as set forth below:
| Exhibit No. | Description | |
| (a)(5)(U) | Press Release issued by QIAGEN N.V., dated August 4, 2020. | |
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
| QIAGEN N.V. | ||
| By: | /s/ Roland Sackers | |
| Name: Roland Sackers Title: Chief Financial Officer | ||
Date: August 4, 2020
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Exhibit (a)(5)(U)
QIAGEN reports full results for second quarter and first half of 2020
| • | Q2 2020 results: |
| • | Net sales of $443.3 million (+16% actual, +19% CER) |
| • | Diluted EPS $0.38; adjusted EPS $0.55 ($0.56 CER, +70% CER) |
| • | H1 2020 results: |
| • | Net sales of $815.3 million (+12% actual, +14% CER) |
| • | Diluted EPS $0.56; adjusted EPS $0.89 ($0.90 CER, +50% CER) |
| • | QIAGEN Boards have reaffirmed unanimous recommendation that QIAGEN shareholders accept Thermo Fisher Offer and tender their shares on or before August 10 |
Venlo, the Netherlands, August 4, 2020 – QIAGEN N.V. (NYSE: QGEN; Frankfurt Prime Standard: QIA) announced full results of operations for the second quarter and first half of 2020, with net sales and adjusted earnings per share (EPS) in line with the preliminary results announced on July 9, 2020, and July 13, 2020. Net sales for the second quarter of 2020 grew 16% over the second quarter of 2019 (+19% at constant exchange rates, or CER), and adjusted earnings per share were $0.56 CER (+70% CER) for the quarter.
“The unprecedented demand for products used in coronavirus testing is driving QIAGEN’s performance in 2020. Our employees around the world are fully mobilized to serve all of our customers in the public health response to the pandemic throughout the world,” said Thierry Bernard, Chief Executive Officer of QIAGEN N.V. “Sales of testing solutions for the novel coronavirus were strong across all regions in the first half of 2020, for research in the Life Sciences and among Molecular Diagnostics customers for use in identifying patients with COVID-19. Demand for QuantiFERON-TB and other applications was reduced as the pandemic continues to curtail demand for non-COVID-19 healthcare and research activity.”
Mr. Bernard continued: “We recently reached an amended business combination agreement with Thermo Fisher Scientific Inc., increasing the tender offer price for QIAGEN shares to €43.00. QIAGEN’s Supervisory Board and Managing Board reaffirmed their unanimous support for the offer and their unanimous recommendation that QIAGEN shareholders accept and tender all of their QIAGEN shares in the offer prior to the end of the acceptance period, which has been extended to August 10, 2020. We look forward to working closely with Thermo Fisher to successfully complete this transaction.”
Roland Sackers, Chief Financial Officer of QIAGEN N.V., added: “QIAGEN’s swift response in scaling up production capacity for testing solutions to help fight the pandemic supported the double-digit sales growth in the second quarter. The coronavirus pandemic also had an impact on our business environment, reducing operating costs such as marketing and travel, and therefore resulting in an improvement of adjusted operating income margin and free cash flow.”
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Selected key figures
| In $ millions (Unless indicated / EPS $ per share) |
Q2 |
H1 | ||||||||||
| 2020 |
2019 |
Change |
2020 |
2019 |
Change | |||||||
| Net sales
|
443.3
|
381.6
|
16% (19% CER) |
815.3
|
730.3
|
12% (14% CER) | ||||||
| Operating income |
118.7 | 60.2 | 97% | 186.0 | 101.3 | 84% | ||||||
| Adjusted operating income |
159.9 | 99.1 | 61% | 260.0 | 177.0 | 47% | ||||||
| Net income |
89.8 | 44.7 | 101% | 129.6 | 74.2 | 75% | ||||||
| Adjusted net income |
128.8 | 77.4 | 66% | 207.3 | 139.4 | 49% | ||||||
| Diluted EPS(1) |
$0.38 | $0.19 | 100% | $0.56 | $0.32 | 70% | ||||||
| Adjusted diluted EPS(1)
|
$0.55 $0.56 CER |
$0.33
|
67% 70% CER |
$0.89 $0.90 CER |
$0.60
|
48% 50% CER | ||||||
| Net cash provided by operating activities |
134.7 | 82.5 | 63% | 150.6 | 127.2 | 18% | ||||||
| Less purchases of property, plant and equipment |
(30.2) | (31.0) | (50.2) | (54.4) | ||||||||
|
|
|
|
|
|
| |||||||
| Free cash flow |
104.5 | 51.5 | 103% | 100.4 | 72.9 | 38% | ||||||
|
|
|
|
|
|
| |||||||
| (1) | Weighted number of diluted shares (Q2 2020: 234.0 million, Q2 2019: 232.7 million); (H1 2020: 233.1 million, H1 2019 233.2 million) |
Please refer to accompanying tables for reconciliation of reported to adjusted figures.
CER - Constant exchange rates. CER sales results (Q2 2020: $452.4 million, H1 2020: $831.4 million)
Percentage changes are to prior-year periods. Tables may have rounding differences.
Net sales by product category and customer class
| Q2 2020 |
H1 2020 | |||||||||||||||
| Net sales: $443.3 million |
Net sales: $815.3 million | |||||||||||||||
| Sales |
% |
% CER |
% of |
Sales |
% |
% CER |
% of | |||||||||
| Consumables and related revenues |
$375 | +12% | +14% | 85% | $701 | +8% | +10% | 86% | ||||||||
| Instruments |
$68 | +45% | +48% | 15% | $114 | +38% | +41% | 14% | ||||||||
| Molecular Diagnostics(1) |
$204 | +9% | +12% | 46% | $380 | +7% | +9% | 47% | ||||||||
| Life Sciences |
$239 | +23% | +25% | 54% | $435 | +16% | +18% | 53% | ||||||||
| Academia / Applied Testing |
$164 | +39% | +42% | 37% | $287 | +26% | +28% | 35% | ||||||||
| Pharma |
$75 | -1% | 0% | 17% | $148 | +1% | +2% | 18% | ||||||||
| (1) | Includes companion diagnostic co-development sales (Q2 2020: $7 million, -31%, -30% CER; H1 2020: $14 million, -39%, -39% CER) |
Tables may have rounding differences. Percentage changes are to prior-year periods.
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Net sales by geographic region
| Q2 2020 |
H1 2020 | |||||||||||||||
| Net sales: $443.3 million |
Net sales: $815.3 million | |||||||||||||||
| Sales |
% |
% CER |
% of |
Sales |
% |
% CER |
% of | |||||||||
| Americas |
$177 | -2% | -1% | 40% | $351 | 0% | +1% | 43% | ||||||||
| Europe / Middle East / Africa |
$164 | +40% | +44% | 37% | $293 | +29% | +33% | 36% | ||||||||
| Asia-Pacific / Japan(1) |
$99 | +20% | +23% | 23% | $168 | +11% | +14% | 21% | ||||||||
| (1) | Asia-Pacific / Japan sales excluding China (Q2 2020: +32%, +35% CER and H1 2020: +18%, +21% CER) |
Tables may have rounding differences. Percentage changes are to prior-year periods. Rest of world represented less than 1% of sales.
Second quarter 2020 results
Total net sales rose 16% to $443.3 million in the second quarter of 2020 from $381.6 million in the same period of 2019. Growth was 19% at constant exchange rates (CER) as currency movements against the U.S. dollar had a negative impact of about three percentage points on the results.
Instrument sales increased 48% CER and 45% at actual rates in the second quarter of 2020 to $67.8 million from $46.7 million in the same period of 2019 amid ongoing strong demand for QIAGEN platforms, including the QIAsymphony automation system and the QIAcube family of sample processing instruments. Sales of consumables and related revenues rose 14% CER and 12% at actual rates to $375.5 million from $334.9 million in the year-ago period as demand remains high for products used in coronavirus testing. These products include RNA sample technology kits, reagents sold to third parties for use in their own kits, and cartridges for the QIAstat-Dx syndromic testing platform. Among the customer classes, Life Sciences sales increased 25% CER and 23% at actual rates to $238.9 million from $193.6 million in the second quarter of 2019, while Molecular Diagnostics sales grew 12% CER and 9% at actual rates to $204.3 million from $188.0 million in the year-ago period. The QuantiFERON-TB test for latent tuberculosis detection ($33.4 million, -46% CER, -46% at actual rates) faced significant headwinds in the U.S. and Europe due to reduced demand, but experienced accelerating trends in regions where quarantines and lockdown measures have been eased.
Operating income rose 97% to $118.7 million in the second quarter of 2020 from $60.2 million in the second quarter of 2019. Adjusted operating income – which excludes purchased intangibles amortization, long-lived asset impairments and other items such as business integration, acquisition-related costs, litigation costs and restructuring – rose 61% to $159.9 million (36% of sales) from $99.1 million (26% of sales) in the second quarter of 2019.
Net income was $89.8 million in the second quarter of 2020, or $0.38 per diluted share (based on 234.0 million diluted shares), compared to $44.7 million, or $0.19 per diluted share (based on 232.7 million diluted shares) in the same period of 2019. Adjusted net income rose to $128.8 million, or $0.55 per diluted share ($0.56 CER), from $77.4 million, or $0.33 per diluted share, in the prior-year quarter.
First half 2020 results
Total net sales rose 12% to $815.3 million in the first half of 2020 from $730.3 million in the same period of 2019. Growth was 14% at constant exchange rates (CER) as currency movements against the U.S. dollar had a negative impact of two percentage points.
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Operating income rose 84% to $186.0 million in the first half of 2020 from $101.3 million in the first half of 2019. Results for the 2020 period included pre-tax charges of $2.4 million related to restructuring measures announced in 2019 to discontinue next-generation sequencing (NGS) instrument development programs and prioritize resource allocation. Adjusted operating income - which excludes purchased intangibles amortization, long-lived asset impairments and other items such as business integration, acquisition-related costs, litigation costs and restructuring - rose 47% to $260.0 million (32% of sales) from $177.0 million (24% of sales) in the first half of 2019.
Net income was $129.6 million in the first half of 2020, or $0.56 per diluted share (based on 233.1 million diluted shares), compared to $74.2 million, or $0.32 per diluted share (based on 233.2 million diluted shares) in the same period of 2019. Adjusted net income rose to $207.3 million in the first half of 2020, or $0.89 per diluted share ($0.90 CER), from $139.4 million, or $0.60 per diluted share, in the first half of 2019. Results for the first half of 2020 included an after-tax charge of $0.01 per share (based on 233.1 million diluted shares) for the restructuring measures announced in 2019.
Balance sheet and cash flows
At June 30, 2020, cash, cash equivalents and restricted cash rose to $692.2 million from $629.4 million at December 31, 2019. Net cash provided by operating activities for the first six months of 2020 rose to $150.6 million, which included $46.0 million of cash payments for restructuring measures, compared to $127.2 million in the same period of 2019. Purchases of Property, Plant and Equipment declined to $50.2 million (6% of sales) from $54.4 million (7% of sales) in the same period of 2019. Free cash flow rose to $100.4 million for the first six months of 2020 from $72.9 million in the same period of 2019. Net cash used in investing activities was $66.9 million in the 2020 period, which included $80.9 million for digital PCR assets. This compares to net cash used in investing activities in the first six months of 2019 of $128.4 million, which included $125.0 million for the acquisition of digital PCR assets. Net cash used in financing activities was $16.4 million for the first six months of 2020 compared to $534.1 million in the 2019 period, which included $430.0 million for redemption of the 2019 convertible notes and $74.4 million for the share repurchase program.
Amended Terms of the Business Combination Agreement with Thermo Fisher
On July 16, 2020, an amendment was announced to the business combination agreement under which Thermo Fisher has commenced a tender offer to acquire all of the ordinary shares of QIAGEN. Thermo Fisher increased the original offer price of €39.00 to €43.00 per QIAGEN share in cash. The amendment also provides for a reduction of the minimum acceptance threshold from 75% to 66.67% of QIAGEN’s issued and outstanding ordinary share capital at the end of the acceptance period on August 10, 2020, as well as a $95.0 million expense reimbursement payment payable by QIAGEN to Thermo Fisher if the minimum acceptance threshold is not met.
The members of QIAGEN’s Supervisory Board and Managing Board have reaffirmed their unanimous support for the offer and their unanimous recommendation that all QIAGEN shareholders accept and tender all of their QIAGEN shares in the offer prior to the end of the acceptance period. Each of the members of the QIAGEN Boards have tendered all of their shares into the offer. A Supplemental Reasoned Position Statement was released on July 22, 2020, and is available on QIAGEN’s website at www.qiagen.com.
Conference call
In light of the announced transaction with Thermo Fisher, QIAGEN is no longer holding investor conference calls for quarterly results.
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Use of adjusted results
QIAGEN reports adjusted results, as well as results on a constant exchange rate (CER) basis, and other non-U.S. GAAP figures (generally accepted accounting principles), to provide additional insight into its performance. These results include adjusted gross profit, adjusted operating income, adjusted operating income margin, adjusted net income, adjusted diluted EPS, adjusted income taxes and free cash flow. Adjusted results are non-GAAP financial measures that QIAGEN believes should be considered in addition to reported results prepared in accordance with GAAP, but should not be considered as a substitute. Free cash flow is calculated by deducting capital expenditures for Property, Plant & Equipment from cash flow from operating activities. QIAGEN believes certain items should be excluded from adjusted results when they are outside of ongoing core operations, vary significantly from period to period, or affect the comparability of results with competitors and its own prior periods. Furthermore, QIAGEN uses non-GAAP and constant currency financial measures internally in planning, forecasting and reporting, as well as to measure and compensate employees. QIAGEN also uses adjusted results when comparing current performance to historical operating results, which have consistently been presented on an adjusted basis. Reconciliations are included in the tables accompanying this report.
About QIAGEN
QIAGEN N.V., a Netherlands-based holding company, is the leading global provider of Sample to Insight solutions that enable customers to gain valuable molecular insights from samples containing the building blocks of life. Our sample technologies isolate and process DNA, RNA and proteins from blood, tissue and other materials. Assay technologies make these biomolecules visible and ready for analysis. Bioinformatics software and knowledge bases interpret data to report relevant, actionable insights. Automation solutions tie these together in seamless and cost-effective workflows. QIAGEN provides solutions to more than 500,000 customers around the world in Molecular Diagnostics (human healthcare) and Life Sciences (academia, pharma R&D and industrial applications, primarily forensics). As of June 30, 2020, QIAGEN employed more than 5,200 people in over 35 locations worldwide. Further information can be found at http://www.qiagen.com.
Certain statements contained in this press release may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. To the extent that any of the statements contained herein relating to QIAGEN’s products, launches, regulatory submissions, collaborations, markets, strategy, taxes or operating results, including without limitation its expected outlook, net sales, net sales of particular products (including anticipated sales of its QFT-Plus test for latent TB, its portfolio of next generation sequencing solutions and QIAstat-Dx), net sales in particular geographies, adjusted net sales, adjusted diluted earnings per share results, the expected continuation of trends from the second quarter and first half of 2020, product demand, capacity expansion, liquidity position, product launches (including anticipated launches of next generation sequencing solutions, the QIAstat-Dx syndromic testing platform, a gastrointestinal panel in the U.S., and a CE-IVD marked panel for meningitis), placements of QIAsymphony modular PCR instruments, improvements in operating and financial leverage, currency movements against the U.S. dollar, plans for investment in its portfolio and share repurchase commitments, plans to shift its Global Operations organization to a regional manufacturing structure, our ability to grow adjusted earnings per share at a greater rate than sales, our ability to improve operating efficiencies and maintain disciplined capital allocation, the recommended offer by Thermo Fisher Scientific, Inc. and the expected benefits related to the proposed transaction, the acquisition of NeuMoDx, NeuMoDx’s business plans, and the expected divestiture of ArcherDX, are forward-looking, such statements are based on current expectations and assumptions that involve a number of uncertainties and risks. Such uncertainties and risks include, but are not limited to, risks associated with management of growth and international operations (including the effects of currency fluctuations, regulatory processes and dependence on logistics); variability of operating results and allocations between customer classes; the commercial development of markets for our products to customers in academia, pharma, applied testing and molecular diagnostics; changing relationships with customers, suppliers and strategic partners; competition; rapid or unexpected changes in technologies; fluctuations in demand for QIAGEN’s products (including fluctuations due to general economic conditions, the level and timing of customers’ funding, budgets and other factors); our ability to
5
obtain regulatory approval of our products; difficulties in successfully adapting QIAGEN’s products to integrated solutions and producing such products; the ability of QIAGEN to identify and develop new products and to differentiate and protect our products from competitors’ products; market acceptance of QIAGEN’s new products and the integration of acquired technologies and businesses; actions of governments, global or regional economic developments, weather or transportation delays, natural disasters, political or public health crises, including the breadth and duration of the COVID-19 pandemic and its impact on the demand for our products and other aspects of our business, or other force majeure events; as well as the possibility that expected benefits related to recent or pending acquisitions, including the pending acquisition by Thermo Fisher Scientific Inc., may not materialize as expected; and the other factors discussed under the heading “Risk Factors” contained in Item 3 of our most recent Annual Report on Form 20-F. For further information, please refer to the discussions in reports that QIAGEN has filed with, or furnished to, the U.S. Securities and Exchange Commission (SEC).
Additional Information and Where to Find It
This communication is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell any ordinary shares of QIAGEN or any other securities, nor is it a substitute for the tender offer materials that Thermo Fisher or its acquisition subsidiary file with the SEC and publish in Germany. The terms and conditions of the tender offer are published in, and the offer to purchase ordinary shares of QIAGEN is made only pursuant to, the offer document as permitted for publication by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) and related offer materials prepared by Thermo Fisher and its acquisition subsidiary, including the amendment of the offer. The offer document and related offer materials have been published in Germany and filed with the SEC in a tender offer statement on Schedule TO on May 18, 2020, as amended from time to time. The amendment of the offer has been published in Germany and filed with the SEC in an amendment to the tender offer statement on Schedule TO on July 17, 2020. QIAGEN has filed a solicitation/recommendation statement on Schedule 14D-9 with the SEC with respect to the tender offer on May 18, 2020, as amended from time to time; in addition, QIAGEN has published a document combining the recommendation statement pursuant to Sec. 27 of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz, “WpÜG”) and the position statement (gemotiveerde standpuntbepaling) pursuant to Section 18 and appendix G of the Dutch Decree on Public Takeovers (Besluit Openbare Biedingen). In addition, on July 22, 2020, QIAGEN has published a supplement to the solicitation/recommendation statement, which QIAGEN filed with an amendment to its solicitation/recommendation statement on Schedule 14D-9 with the SEC. The offer document for the tender offer and the amendment of the offer (in German and in English) containing the detailed terms and conditions of, and other information relating to, the tender offer, among other things, are published on the internet at https://corporate.thermofisher.com/en/offer.html.
Acceptance of the tender offer by shareholders that are resident outside Germany and the United States may be subject to further legal requirements. With respect to the acceptance of the tender offer outside Germany and the United States, no responsibility is assumed for the compliance with such legal requirements applicable in the respective jurisdiction.
THE TENDER OFFER MATERIALS (INCLUDING THE OFFER DOCUMENT, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER OFFER DOCUMENTS), THE SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 AND QIAGEN’S RECOMMENDATION STATEMENT PURSUANT TO SEC. 27 WPÜG AND POSITION STATEMENT (GEMOTIVEERDE STANDPUNTBEPALING) PURSUANT TO SECTION 18 AND APPENDIX G OF THE DUTCH DECREE ON PUBLIC TAKEOVERS (BESLUIT OPENBARE BIEDINGEN), AS THEY MAY BE AMENDED FROM TIME TO TIME, CONTAIN IMPORTANT INFORMATION. INVESTORS AND SHAREHOLDERS OF QIAGEN ARE URGED TO READ THESE DOCUMENTS CAREFULLY BECAUSE THEY, AND NOT THIS DOCUMENT, GOVERN THE TERMS AND CONDITIONS OF THE TENDER OFFER, AND BECAUSE THEY CONTAIN IMPORTANT INFORMATION THAT SUCH PERSONS SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR ORDINARY SHARES.
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The tender offer materials, including the offer document, the amendment of the offer and the related letter of transmittal and certain other tender offer documents, and the solicitation/recommendation statement, the supplemental solicitation/recommendation statement and other documents filed with the SEC by Thermo Fisher or QIAGEN, may be obtained free of charge at the SEC’s website at www.sec.gov or at QIAGEN’s website at www.qiagen.com or by contacting QIAGEN’s investor relations department at 240-686-2222 or at Thermo Fisher’s website at www.thermofisher.com or by contacting Thermo Fisher’s investor relations department at 781-622-1111. In addition, Thermo Fisher’s tender offer statement and other documents filed with the SEC are available at https://ir.thermofisher.com/investors. Furthermore, copies of the offer document and the amendment of the offer are also available free of charge by contacting D.F. King & Co., Inc., Thermo Fisher’s information agent for the tender offer.
Contacts
John Gilardi
Vice President Corporate Communications and Investor Relations
+49 2103 29 11711 and +1 240 686 2222 / john.gilardi@qiagen.com
Phoebe Loh
Director Investor Relations
+49 2103 29 11457 / phoebe.loh@qiagen.com
Dr. Thomas Theuringer
Senior Director Public Relations and Digital Communications
+49 2103 29 11826 and +1 240 686 7425 / thomas.theuringer@qiagen.com
Robert Reitze
Senior Manager Public Relations
+49 2103 29 11676 / robert.reitze@qiagen.com
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QIAGEN N.V.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
| Three months | ||||||||
| ended June 30, | ||||||||
| (In $ thousands, except per share data) | 2020 | 2019 | ||||||
| Net sales |
443,252 | 381,612 | ||||||
| Cost of sales: |
||||||||
| Cost of sales |
133,340 | 115,969 | ||||||
| Acquisition-related intangible amortization |
14,942 | 19,728 | ||||||
|
|
|
|
|
|||||
| Total cost of sales |
148,282 | 135,697 | ||||||
|
|
|
|
|
|||||
| Gross profit |
294,970 | 245,915 | ||||||
|
|
|
|
|
|||||
| Operating expenses: |
||||||||
| Research and development |
31,818 | 40,827 | ||||||
| Sales and marketing |
94,376 | 100,686 | ||||||
| General and administrative |
23,863 | 29,590 | ||||||
| Acquisition-related intangible amortization |
5,022 | 8,687 | ||||||
| Restructuring, acquisition, integration and other, net |
21,121 | 4,805 | ||||||
| Long-lived asset impairments |
75 | 1,144 | ||||||
|
|
|
|
|
|||||
| Total operating expenses |
176,275 | 185,739 | ||||||
|
|
|
|
|
|||||
| Income from operations |
118,695 | 60,176 | ||||||
|
|
|
|
|
|||||
| Other income (expense): |
||||||||
| Interest income |
3,497 | 5,163 | ||||||
| Interest expense |
(17,440 | ) | (18,226 | ) | ||||
| Other income, net |
4,000 | 4,711 | ||||||
|
|
|
|
|
|||||
| Total other expense |
(9,943 | ) | (8,352 | ) | ||||
|
|
|
|
|
|||||
| Income before income taxes |
108,752 | 51,824 | ||||||
| Income tax expense |
18,988 | 7,096 | ||||||
|
|
|
|
|
|||||
| Net income |
89,764 | 44,728 | ||||||
|
|
|
|
|
|||||
| Diluted net income per common share |
$ | 0.38 | $ | 0.19 | ||||
| Diluted net income per common share (adjusted) |
$ | 0.55 | $ | 0.33 | ||||
| Diluted shares used in computing diluted net income per common share |
234,027 | 232,712 | ||||||
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QIAGEN N.V.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
| Six months | ||||||||
| ended June 30, | ||||||||
| (In $ thousands, except per share data) | 2020 | 2019 | ||||||
| Net sales |
815,349 | 730,266 | ||||||
| Cost of sales: |
||||||||
| Cost of sales |
246,787 | 222,306 | ||||||
| Acquisition-related intangible amortization |
30,054 | 37,205 | ||||||
|
|
|
|
|
|||||
| Total cost of sales |
276,841 | 259,511 | ||||||
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|
|
|
|
|||||
| Gross profit |
538,508 | 470,755 | ||||||
|
|
|
|
|
|||||
| Operating expenses: |
||||||||
| Research and development |
66,630 | 81,615 | ||||||
| Sales and marketing |
190,133 | 196,572 | ||||||
| General and administrative |
52,057 | 58,226 | ||||||
| Acquisition-related intangible amortization |
10,113 | 18,013 | ||||||
| Restructuring, acquisition, integration and other, net |
32,532 | 13,743 | ||||||
| Long-lived asset impairments |
1,034 | 1,258 | ||||||
|
|
|
|
|
|||||
| Total operating expenses |
352,499 | 369,427 | ||||||
|
|
|
|
|
|||||
| Income from operations |
186,009 | 101,328 | ||||||
|
|
|
|
|
|||||
| Other income (expense): |
||||||||
| Interest income |
6,681 | 13,251 | ||||||
| Interest expense |
(36,362 | ) | (38,616 | ) | ||||
| Other (expense) income, net |
(1,246 | ) | 4,319 | |||||
|
|
|
|
|
|||||
| Total other expense |
(30,927 | ) | (21,046 | ) | ||||
|
|
|
|
|
|||||
| Income before income taxes |
155,082 | 80,282 | ||||||
| Income tax expense |
25,489 | 6,034 | ||||||
|
|
|
|
|
|||||
| Net income |
129,593 | 74,248 | ||||||
|
|
|
|
|
|||||
| Diluted net income per common share |
$ | 0.56 | $ | 0.32 | ||||
| Diluted net income per common share (adjusted) |
$ | 0.89 | $ | 0.60 | ||||
| Diluted shares used in computing diluted net income per common share |
233,119 | 233,160 | ||||||
9
QIAGEN N.V.
RECONCILIATION OF REPORTED TO ADJUSTED FIGURES
(unaudited)
Three months ended June 30, 2020
(In $ millions, except EPS data)
| Net Sales |
Gross Profit |
Operating Income |
Pre-tax Income |
Income Tax |
Tax Rate |
Net Income |
Diluted EPS* |
|||||||||||||||||||||||||
| Reported results |
443.3 | 295.0 | 118.7 | 108.8 | (19.0 | ) | 17 | % | 89.8 | $ | 0.38 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||
| Business integration, acquisition and restructuring related items (including litigation) |
— | — | 21.2 | 21.2 | (5.3 | ) | 15.9 | 0.07 | ||||||||||||||||||||||||
| Purchased intangibles amortization |
— | 14.9 | 20.0 | 20.0 | (5.1 | ) | 14.9 | 0.06 | ||||||||||||||||||||||||
| Non-cash interest expense charges |
— | — | — | 10.2 | — | 10.2 | 0.04 | |||||||||||||||||||||||||
| Other special income and expense items |
— | — | — | (2.6 | ) | 0.6 | (2.0 | ) | 0.00 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total adjustments |
— | 14.9 | 41.2 | 48.8 | (9.8 | ) | 39.0 | 0.17 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Adjusted results |
443.3 | 309.9 | 159.9 | 157.6 | (28.8 | ) | 18 | % | 128.8 | $ | 0.55 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| * | Using 234.0 M diluted shares. |
Three months ended June 30, 2019
(In $ millions, except EPS data)
| Net Sales |
Gross Profit |
Operating Income |
Pre-tax Income |
Income Tax |
Tax Rate |
Net Income |
Diluted EPS* |
|||||||||||||||||||||||||
| Reported results |
381.6 | 245.9 | 60.2 | 51.8 | (7.1 | ) | 14 | % | 44.7 | $ | 0.19 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||
| Business integration, acquisition and restructuring related items (including litigation) |
— | 4.5 | 10.5 | 10.5 | (2.9 | ) | 7.6 | 0.03 | ||||||||||||||||||||||||
| Purchased intangibles amortization |
— | 19.7 | 28.4 | 28.4 | (7.3 | ) | 21.2 | 0.09 | ||||||||||||||||||||||||
| Non-cash interest expense charges |
— | — | — | 9.3 | — | 9.3 | 0.04 | |||||||||||||||||||||||||
| Other special income and expense items |
— | — | — | (3.8 | ) | (1.6 | ) | (5.4 | ) | (0.02 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total adjustments |
— | 24.3 | 38.9 | 44.4 | (11.7 | ) | 32.7 | 0.14 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Adjusted results |
381.6 | 270.2 | 99.1 | 96.2 | (18.8 | ) | 20 | % | 77.4 | $ | 0.33 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| * | Using 232.7 M diluted shares |
Tables may contain rounding differences
10
QIAGEN N.V.
RECONCILIATION OF REPORTED TO ADJUSTED FIGURES
(unaudited)
Six months ended June 30, 2020
(In $ millions, except EPS data)
| Net Sales |
Gross Profit |
Operating Income |
Pre-tax Income |
Income Tax |
Tax Rate |
Net Income |
Diluted EPS* |
|||||||||||||||||||||||||
| Reported results |
815.3 | 538.5 | 186.0 | 155.1 | (25.5 | ) | 16 | % | 129.6 | $ | 0.56 | |||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||
| Business integration, acquisition and restructuring related items (including litigation) |
— | 0.2 | 31.4 | 31.4 | (8.0 | ) | 23.4 | 0.10 | ||||||||||||||||||||||||
| 2019 restructuring measures |
— | — | 2.4 | 2.4 | (0.6 | ) | 1.8 | 0.01 | ||||||||||||||||||||||||
| Purchased intangibles amortization |
— | 30.1 | 40.2 | 40.2 | (10.2 | ) | 30.0 | 0.13 | ||||||||||||||||||||||||
| Non-cash interest expense charges |
— | — | — | 19.7 | — | 19.7 | 0.08 | |||||||||||||||||||||||||
| Other special income and expense items |
— | — | — | 3.7 | (0.9 | ) | 2.8 | 0.01 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total adjustments |
— | 30.3 | 74.0 | 97.4 | (19.7 | ) | 77.7 | 0.33 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Adjusted results |
815.3 | 568.8 | 260.0 | 252.5 | (45.2 | ) | 18 | % | 207.3 | $ | 0.89 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| * | Using 233.1 M diluted shares. |
Six months ended June 30, 2019
(In $ millions, except EPS data)
| Net Sales |
Gross Profit |
Operating Income |
Pre-tax Income |
Income Tax |
Tax Rate |
Net Income |
Diluted EPS* |
|||||||||||||||||||||||||
| Reported results |
730.3 | 470.8 | 101.3 | 80.3 | (6.0 | ) | 7 | % | 74.2 | $ | 0.32 | |||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||
| Business integration, acquisition and restructuring related items (including litigation) |
— | 5.4 | 20.4 | 20.4 | (5.5 | ) | 14.9 | 0.06 | ||||||||||||||||||||||||
| Purchased intangible amortization |
— | 37.2 | 55.2 | 55.2 | (14.1 | ) | 41.1 | 0.18 | ||||||||||||||||||||||||
| Non-cash interest expense charges |
— | — | — | 21.2 | — | 21.2 | 0.09 | |||||||||||||||||||||||||
| Other special income and expense items |
— | — | — | (3.8 | ) | (8.3 | ) | (12.1 | ) | (0.05 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total adjustments |
— | 42.6 | 75.7 | 93.1 | (28.0 | ) | 65.2 | 0.28 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Adjusted results |
730.3 | 513.4 | 177.0 | 173.4 | (34.0 | ) | 20 | % | 139.4 | $ | 0.60 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| * | Using 233.2 M diluted shares |
Tables may contain rounding differences
11
QIAGEN N.V.
CONDENSED CONSOLIDATED BALANCE SHEETS
| (In $ thousands, except par value) | June 30, 2020 |
December 31, 2019 |
||||||
| Assets |
(unaudited | ) | ||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
688,264 | 623,647 | ||||||
| Restricted cash |
3,942 | 5,743 | ||||||
| Short-term investments |
55,981 | 129,586 | ||||||
| Accounts receivable, net |
372,473 | 385,117 | ||||||
| Income taxes receivable |
32,158 | 42,119 | ||||||
| Inventories, net |
202,804 | 170,704 | ||||||
| Fair value of derivative instruments - current |
150,962 | 107,868 | ||||||
| Prepaid expenses and other current assets |
129,014 | 105,464 | ||||||
|
|
|
|
|
|||||
| Total current assets |
1,635,598 | 1,570,248 | ||||||
|
|
|
|
|
|||||
| Long-term assets: |
||||||||
| Property, plant and equipment, net |
475,099 | 455,243 | ||||||
| Goodwill |
2,134,810 | 2,140,503 | ||||||
| Intangible assets, net |
600,713 | 632,434 | ||||||
| Deferred income tax assets |
62,500 | 56,542 | ||||||
| Fair value of derivative instruments - long-term |
203,529 | 192,266 | ||||||
| Other long-term assets |
182,264 | 188,380 | ||||||
|
|
|
|
|
|||||
| Total long-term assets |
3,658,915 | 3,665,368 | ||||||
|
|
|
|
|
|||||
| Total assets |
5,294,513 | 5,235,616 | ||||||
|
|
|
|
|
|||||
| Liabilities and Equity |
||||||||
| Current liabilities: |
||||||||
| Current portion of long-term debt |
305,776 | 285,244 | ||||||
| Accounts payable |
94,850 | 84,767 | ||||||
| Fair value of derivative instruments - current |
147,156 | 103,175 | ||||||
| Accrued and other current liabilities |
345,542 | 444,303 | ||||||
| Income taxes payable |
63,359 | 33,856 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
956,683 | 951,345 | ||||||
|
|
|
|
|
|||||
| Long-term liabilities: |
||||||||
| Long-term debt, net of current portion |
1,400,179 | 1,421,108 | ||||||
| Deferred income tax liabilities |
21,872 | 23,442 | ||||||
| Fair value of derivative instruments - long-term |
191,070 | 196,929 | ||||||
| Other long-term liabilities |
103,858 | 106,201 | ||||||
|
|
|
|
|
|||||
| Total long-term liabilities |
1,716,979 | 1,747,680 | ||||||
|
|
|
|
|
|||||
| Equity: |
||||||||
| Common shares, EUR .01 par value: Authorized - 410,000 shares, issued - 230,829 shares |
2,702 | 2,702 | ||||||
| Additional paid-in capital |
1,793,521 | 1,777,017 | ||||||
| Retained earnings |
1,262,077 | 1,178,457 | ||||||
| Accumulated other comprehensive loss |
(351,611 | ) | (309,619 | ) | ||||
| Less treasury stock, at cost — 2,343 and 3,077 shares in 2020 and 2019, respectively |
(85,838 | ) | (111,966 | ) | ||||
|
|
|
|
|
|||||
| Total equity |
2,620,851 | 2,536,591 | ||||||
|
|
|
|
|
|||||
| Total liabilities and equity |
5,294,513 | 5,235,616 | ||||||
|
|
|
|
|
|||||
12
QIAGEN N.V.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| Six months ended June 30, | ||||||||
| (In $ thousands) | 2020 | 2019 | ||||||
| Cash flows from operating activities: |
||||||||
| Net income |
129,593 | 74,248 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities, net of effects of businesses acquired: |
||||||||
| Depreciation and amortization |
97,016 | 121,625 | ||||||
| Non-cash impairments |
1,034 | 1,258 | ||||||
| Amortization of debt discount and issuance costs |
20,099 | 21,576 | ||||||
| Share-based compensation expense |
16,504 | 23,210 | ||||||
| Deferred income tax benefit |
(6,592 | ) | (7,319 | ) | ||||
| Loss on marketable securities |
167 | 897 | ||||||
| Reversals of contingent consideration |
— | (7,433 | ) | |||||
| Loss on sale of investment |
2,250 | — | ||||||
| Other items, net including fair value changes in derivatives |
2,586 | (5,250 | ) | |||||
| Net changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
(8,479 | ) | (16,291 | ) | ||||
| Inventories |
(48,126 | ) | (15,672 | ) | ||||
| Prepaid expenses and other current assets |
(34,388 | ) | 656 | |||||
| Other long-term assets |
897 | 376 | ||||||
| Accounts payable |
(1,197 | ) | (10,600 | ) | ||||
| Accrued and other current liabilities |
(63,828 | ) | (41,945 | ) | ||||
| Income taxes |
38,333 | (13,113 | ) | |||||
| Other long-term liabilities |
4,726 | 993 | ||||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
150,595 | 127,216 | ||||||
|
|
|
|
|
|||||
| Cash flows from investing activities: |
||||||||
| Purchases of property, plant and equipment |
(50,179 | ) | (54,359 | ) | ||||
| Purchases of intangible assets |
(99,697 | ) | (134,434 | ) | ||||
| Returns (purchases) of investments, net |
229 | (4,385 | ) | |||||
| Cash paid for acquisitions, net of cash acquired |
(133 | ) | (24,371 | ) | ||||
| Purchases of short-term investments |
(24,877 | ) | (181,696 | ) | ||||
| Proceeds from redemptions of short-term investments |
98,229 | 254,734 | ||||||
| Cash received for collateral asset |
2,683 | 16,150 | ||||||
| Other investing activities |
6,855 | 10 | ||||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(66,890 | ) | (128,351 | ) | ||||
|
|
|
|
|
|||||
| Cash flows from financing activities: |
||||||||
| Proceeds from exercise of call option related to cash convertible notes |
— | 134,676 | ||||||
| Payment of intrinsic value of cash convertible notes |
(11,125 | ) | (133,763 | ) | ||||
| Repayment of long-term debt |
(23,000 | ) | (433,400 | ) | ||||
| Proceeds from issuance of common shares |
7,380 | 1,689 | ||||||
| Tax withholding related to vesting of stock awards |
(6,441 | ) | (17,172 | ) | ||||
| Purchase of treasury shares |
— | (74,394 | ) | |||||
| Cash received for collateral liability |
20,169 | 1,200 | ||||||
| Other financing activities |
(3,381 | ) | (12,935 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in financing activities |
(16,398 | ) | (534,099 | ) | ||||
|
|
|
|
|
|||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash |
(4,491 | ) | 771 | |||||
| Net increase (decrease) in cash, cash equivalents and restricted cash |
62,816 | (534,463 | ) | |||||
| Cash, cash equivalents and restricted cash, beginning of period |
629,390 | 1,159,079 | ||||||
|
|
|
|
|
|||||
| Cash, cash equivalents and restricted cash, end of period |
692,206 | 624,616 | ||||||
|
|
|
|
|
|||||
| Reconciliation of Free Cash Flow(1) |
||||||||
| Net cash provided by operating activities |
150,595 | 127,216 | ||||||
| Purchases of property, plant and equipment |
(50,179 | ) | (54,359 | ) | ||||
|
|
|
|
|
|||||
| Free Cash Flow |
100,416 | 72,857 | ||||||
|
|
|
|
|
|||||
| (1) | Free cash flow is a non-GAAP financial measure and is calculated from cash provided by operations reduced by purchases of property, plant and equipment. QIAGEN believes this is a common financial measure useful to further evaluate the results of operations. |
13